Nomura analysts expects the European Central Bank's (ECB) June macroeconomic projections to incorporate higher market rate assumptions and exclude May Harmonised Indices of Consumer Prices (HICP) data. They foresee HICP and core HICP forecasts revised between previous baseline and adverse paths, with 2026 and 2027 GDP growth nudged lower on weaker Q1 data and mechanical effects, while inflation is still seen around target in Q4 2028.

Inflation near target but softer growth

"At its June meeting, the ECB will update its macroeconomic projections."

"We expect the cutoff date for the technical assumptions (i.e., for natural gas and crude oil prices, as well as market pricing for rates and the exchange rate) to be 19-20 May."

"We expect the finalisation of the real economy projections to take place on 26-27 May."

"This means the ECB’s new forecasts will assume 65bp of hikes by December 2026, rather than the 43bp previously assumed, and May HICP inflation data will not feed into the ECB’s projections."

"We expect HICP inflation and core HICP inflation forecasts to be revised to a level between that of the ECB’s baseline and adverse scenario forecasts from March."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)